First lien mortgage debt decreased
substantially during the second quarter of 2012, bringing overall household
indebtedness down by $53 billion compared to the first quarter of 2012. According to its Quarterly Report on Household Debt and Credit, the Federal Reserve Bank of New York said that first
mortgage debt declined from $8.2 trillion in the first quarter to $8.1 trillion
in the second. At the same time, mortgage
originations, measured by the appearance of new mortgages on consumer credit
reports, rose to $463 billion.
household debt stood at $11.38 trillion at the end of the second quarter, down
0.5 percent from the end of the first quarter and has decreased $1.3 trillion
since its peak in Q3 2008. First
mortgage debt has paralleled that change, dropping from $9.3 trillion at
that peak to its current level.
loan debt increased during the quarter by $13 billion to $750 billion and
student loan debt was up by $10 billion to $914 billion and the outstanding
balances of home
equity lines of credit (HELOCs) remained flat at $0.6 trillion. Credit
card balances are at the lowest level in 10 years and are down 22.4 percent
since they peaked in Quarter 4, 2008.
Balances now stand at $672 billion.
inquiries over the past six months, an indicator of credit demand, decreased 2
percent from Quarter 1, the second consecutive quarter they have fallen.
Fed reported that the serious delinquency rates were mixed. Mortgages delinquencies exceeding 90 days declined
from 6.7 percent in the first quarter to 6.3 percent and credit card
delinquencies from 11.3 percent to 10.9 percent. Auto loan delinquencies were also down to 4.2
percent from 4.6 percent. Student loan
and HELOC delinquencies both increased from quarter to quarter with student loans
rising from 8.7 percent to 8.9 percent and HELOCs from 4.2 percent to 4.9
are down 55 percent from their peak in the second quarter of 2009 and while
slightly more than a quarter million individuals had new foreclosure notations
added to their credit reports during the quarter, this was 12 percent fewer
than in the first quarter and the lowest number since mid-2007.
"The continuing decrease in delinquency rates
suggests that consumers are managing their debts better," said Wilbert van
Der Klaauw, vice president and economist at the New York Fed. "As
they continue to pay down debt and take advantage of low interest rates,
Americans are moving forward with rebalancing their household